main
side
curve
  1. In Memory of LAJ_FETT: Please share your remembrances and condolences HERE

Senate Universal basic income

Discussion in 'Community' started by VadersLaMent, Jun 26, 2015.

  1. Jedi Merkurian

    Jedi Merkurian Future Films Rumor Naysayer star 7 Staff Member Manager

    Registered:
    May 25, 2000
    While I think it's an interesting concept, we already have a form of UBI in the United States right now: Social Security. And one of the issues I have with UBI, which is an issue with SS, is a mentality of the recipients. A lot of people are -for whatever reason- relying on Social Security as their sole form of income, rather than its intended purpose of being a supplemental income. How would UBI be any different?
     
  2. dp4m

    dp4m Chosen One star 10

    Registered:
    Nov 8, 2001
    Isn't Social Security supposed to be the only income for retirees? Isn't that the point of retiring, plus whatever savings you've accumulated?
     
  3. Jedi Merkurian

    Jedi Merkurian Future Films Rumor Naysayer star 7 Staff Member Manager

    Registered:
    May 25, 2000
    But people don't or can't save money.
     
  4. anakinfansince1983

    anakinfansince1983 Skywalker Saga/LFL/YJCC Manager star 10 Staff Member Manager

    Registered:
    Mar 4, 2011
    It was originally intended as a supplement.
     
  5. Ghost

    Ghost Chosen One star 8

    Registered:
    Oct 13, 2003
    It's still officially intended as a supplement... they assume everyone has 401ks or some form of a pension.

    My mom, as well as all teachers in Rhode Island, don't pay into social security so they won't have any social security. And a few years ago the state decided to cut their pensions, even for those already retired or nearing retirement. People were not happy.
     
  6. Darth Guy

    Darth Guy Chosen One star 10

    Registered:
    Aug 16, 2002
    Half of Americans 55 and over don't have any retirement savings. Social Security will be their only income.
     
    Lord Vivec, KnightWriter and Ghost like this.
  7. VadersLaMent

    VadersLaMent Chosen One star 10

    Registered:
    Apr 3, 2002
    Finland has drafted their bill

    Under the proposed experiment, Kela will provide a basic income of 560 EUR per month (equivalent to about 630 USD), exempt from taxation, to 2000 individuals who are currently receiving unemployment benefits. The sample will be randomly selected from a pool of current beneficiaries of unemployment-related aid. To prevent selection bias, participation in the basic income scheme will be mandatory for those selected.
    A control group will also be drawn from this population; individuals in the control group will continue to receive their typical unemployment benefits.
     
  8. Jabba-wocky

    Jabba-wocky Chosen One star 10

    Registered:
    May 4, 2003
    I think the second clause is the critical one. Judging by the change in poverty rates among senior citizens since its implementation, I don't think the situation is just people being lazy because of Social Security and choosing not to save. Instead, we've always had a considerable population living on the margins that wasn't doing well regardless. Take away Social Security would just make them more hungry, not more "responsible."
     
    Jedi Merkurian likes this.
  9. Sarchet

    Sarchet Jedi Master star 2

    Registered:
    Jan 23, 2016
    The original intent of Social Security in the US was to provide for the handful of people who lived past normal life expectancy and had run through their savings - most people didn't live old enough to draw out of it, when the bill was passed. It was old age insurance basically. To a complies the original goal the age to draw out would have to be moved to somewhere in the 80s.
     
  10. Ender Sai

    Ender Sai Chosen One star 10

    Registered:
    Feb 18, 2001
    It's not hard to implement mandatory retirement savings - we did it, requiring people to have 10% (approx.) of their salary contributed to their superannuation fund per annum. Individuals can contribute their own money, within caps, to the fund and it only pays tax on earnings at 15%. Preservation rules dictate that money in superannuation cannot be accessed until a condition of release has been met - turning 65, retiring early, etc. In limited hardship circumstances, some early release is possible.

    It creates the capacity for retirees to self-fund, and not rely on a diminishing pool of state spending. And the rules around it are very good, meaning it's very hard to let people dip into it for a new TV or the like.
     
  11. Ghost

    Ghost Chosen One star 8

    Registered:
    Oct 13, 2003
    While people might be living longer, most people in their 80's aren't as effective workers and have health problems. It would particularly hurt low-income people who have worked hard in physical labor jobs for their entire lives. Also some demographics have different life expectancies than the average, for example for African-American men in the United States I think it's only 67.

    And here's a recent NYT article about how a high-income city not too far from a low-income city have drastically different life-expectancies... 64 in the low-income city in West Virginia, and 82 for the high-income city in Virginia (for men, for women it's 85 in the high-income and 73 in the low-income, not as drastic but still a very large difference).
    http://www.nytimes.com/2014/03/16/business/income-gap-meet-the-longevity-gap.html?_r=0
     
  12. Jabba-wocky

    Jabba-wocky Chosen One star 10

    Registered:
    May 4, 2003
    I don't see how it would. The median annual salary in the US is $51,939. For simplicity's sake, if we round to $50,000, then even assuming 15% annual compounding interest/ROI, that's still only about $205,000 in 40 years of saving. Assuming a retiree lives on 50% of their previous income, that's still less than 10 years before they run out of money. A full half the country will do still worse than these necessarily very optimistic assumptions.
     
  13. a star war

    a star war Force Ghost star 5

    Registered:
    May 4, 2016
    Have you heard of compound interest, Wocky?
     
  14. Jabba-wocky

    Jabba-wocky Chosen One star 10

    Registered:
    May 4, 2003
    The interest is already compounded, as it says in the actual post. If you think saving $5,000 for 40 years absent compound interest will reach anywhere close to $200,000 I suggest you re-check you math.
     
  15. a star war

    a star war Force Ghost star 5

    Registered:
    May 4, 2016
    5k * 40 = 200,000 exactly.
     
    Ender Sai likes this.
  16. Ender Sai

    Ender Sai Chosen One star 10

    Registered:
    Feb 18, 2001
    Wocky, I feel like research would have helped you here.
     
  17. Jabba-wocky

    Jabba-wocky Chosen One star 10

    Registered:
    May 4, 2003
    This is the compound interest calculator I used.

    EDIT: I see what happened. The interest was to be entered as a percentage, not a decimal figure.
     
  18. a star war

    a star war Force Ghost star 5

    Registered:
    May 4, 2016
    If I save $5,000 a single time over 40 years, then, yes, the compounding interest on that single investment of $,5000 with 15% interest will be ~$200,000 you've got me there. (actually that's over 30 years since the one I used only went to 30)
     
    Ender Sai likes this.
  19. Ender Sai

    Ender Sai Chosen One star 10

    Registered:
    Feb 18, 2001
    Yeah ok, but that doesn't change 5000 * 40 = 200000.

    Notwithstanding that 15% per annum is ridiculously high, Wocky - like, how are you managing that ROI? Average 10 ROI on US equities is merely 7%.

    Anyway, yeah. You would need to first understand the type of retirement savings product you have. A wrap, an industry fund (basically an investment made for the betterment of corrupt union officials, as well as some benefit for union members), a self-managed investment vehicle.

    You also need to understand the evolution of the risk profile of the investor over time. Younger savers will be more Aggressive on their super investment strategy because they can afford the risk of poor returns. Older investors are Balanced or Conservative.

    But, sure. We have a multi-trillion dollar super industry, however a medical professional who thinks 15% compound interest on US$5K per annum would net, after 40 years, $200K is equally as viable a source.

    APPLAUSE. APPLAUSE.
     
  20. Jabba-wocky

    Jabba-wocky Chosen One star 10

    Registered:
    May 4, 2003
    I used an intentionally high ROI because I was trying to calculate a deliberately over-optimistic scenario, as I noted with the "very optimistic assumptions."
     
  21. dp4m

    dp4m Chosen One star 10

    Registered:
    Nov 8, 2001
    My basic calculations on monthly compounding at 5% interest with $5,000 given per year for 40 years:

    $653,193.71
     
  22. Darth Guy

    Darth Guy Chosen One star 10

    Registered:
    Aug 16, 2002
    If you think the average American can afford to put away 10% of their annual income, you're insane. People don't usually lose out on retirement savings because they're stupid or because they want a fancy television. They miss out because they're poor and can't save if they want to make rent, pay utilities, pay for healthcare, eat three meals a day-- and commonly enough they can't afford their living expenses either way.

    And, as I pointed out before, $51,000 is median household income; individual income is not much more than half that.

    And even 5% is a very optimistically high rate these days for the "safe" investments retirement funds tend to go for.
     
    Abadacus, Jedi Merkurian and Ghost like this.
  23. Ender Sai

    Ender Sai Chosen One star 10

    Registered:
    Feb 18, 2001
    So you figured, what, Even? That because Wocky estabkished the precedent of speaking out of his arse that you might as well too?

    Did you do even a second of research? Or is it less important that reminding everyone how much you Care abiut the poor?

    I mean there's only modest overlap in a lot of standard deviations from mean income in the two countries so of course it couldn't work. Like people arent paying their super from pre-tax earnings and most salaries don't include 10% SG contributions. Like for someone on 35k a year the 10% super is paid by employer and not part of their takehome. Which google could have told you.

    The arrogance is why people hate America, fyi.
     
  24. Ender Sai

    Ender Sai Chosen One star 10

    Registered:
    Feb 18, 2001
    Ugh phone typos.
     
  25. a star war

    a star war Force Ghost star 5

    Registered:
    May 4, 2016
    I thought you were Australian.
     
  26. Darth Guy

    Darth Guy Chosen One star 10

    Registered:
    Aug 16, 2002
    You know, I don't have the patience to Google an enormously complicated thing like a foreign country's retirement scheme. (Employer contributions are common in U.S. jobs that have retirment plans.) You could have included that information in your initial post. This is why people hate you, you know.